The reasons could range from extended borrowing ratios, bruised credit, to inability to provide the banks with the required documentation to meet income qualification guidelines.
Given recent regulation changes, and introduction of the "stress test", more people find themselves outside of the spectrum of traditional bank and equity lenders.
This doesn’t mean you are out of options. Private mortgages are a great, fast and flexible financial tool for raising funds to address a challenging problem. The mortgage rate is higher, but conditions minimal. Private mortgages serve a purpose. When combined with a strategy, a private mortgage can work wonders. It is based on common sense and solves tough problems.
Our private mortgages are a flexible financing option for situations where banks, credit unions, and even equity-based lenders will not help. The interest rate can be higher, but conditions are kept to a minimum. There are many reasons why someone might need private financing, which include stopping a Power of Sale, paying off property tax arrears, dealing with CRA arrears, settling collections or judgements, a cash infusion due to an extended absence from work, needing greater flexibility with debt servicing ratios due to income issues, getting out of a rent to own situation or providing temporary bridge financing. Credit issues are usually one of the reasons for requiring a private mortgage. While prime lenders have strict credit guidelines, Brightpath does not. Someone coming out of bankruptcy may need more time to rebuild credit before a bank will consider a mortgage. Or someone currently in a consumer proposal may benefit from paying it off early through private financing, which will allow them to begin rebuilding credit much sooner. Often the self-employed have difficulty providing sufficient proof of income to banks and other prime mortgage lenders. As a result, they are often turned away. However Brightpath Capital has a more common-sense approach to lending, and can take into account details that banks many exclude.
In most cases, the only requirements that we will need is a summary of the situation, a credit report, an appraisal and something to reasonably show the ability to make payments. While credit will not make or break an approval, it can impact the interest rate. Same with the appraisal – the more equity there is, the less risk to the lender which can help lower the costs. Location is another important factor. A property located in a major urban area is viewed more favourably than a rural or remote location. That said, Brightpath Capital has approved mortgages all over Ontario. We offer creative financing solutions to even the toughest situations.
Although helpful in challenging circumstances, a Brightpath Capital mortgage should be viewed as a short term solution to address the immediate need of financing and allow the situation to be resolved so the mortgage can then be moved to a cheaper source once things are back on track. We offer open terms without any penalty to break it early, and can be in 1st or 2nd position depending on the situation. In the case of a 2nd mortgage, it can be timed to the maturity date of a 1st mortgage, so the two can be combined upon maturity.